Cabinet approves 100 percent FDI in railways

New Delhi, Aug 6: The government Wednesday approved a proposal to allow 100 percent foreign direct investment (FDI) for building railways infrastructure. Foreign capital in railways was not allowed till now. However, the new government led by Prime Minister Narendra Modi has been pushing for it to build infrastructure projects such as high-speed railways and railway lines to and from coal mines and ports.

Currently, the cash-strapped railways cannot fund these projects without private participation. Foreign players from Japan and China are said to be keen to participate in building up of the infrastructure. The proposal sought to allow FDI participation in erecting projects relating to electrification, high-speed tracks and suburban corridors.

Last-mile connectivity to boost business activity in and around ports and mines has been proposed through formation of special purpose vehicle (SPV) companies under the public private partnership (PPP) model.